Why Medtronic Stock May Have Just Become the Best Buy in the Entire Healthcare Sector

Investing in healthcare hasn't been all that exciting an option for investors in recent years. But over the long term, it can lead to significant returns. Healthcare is not only essential but a growing part of the economy. Companies that are key to the sector's long-term growth can make for excellent investments.

The stock that may be the best one to buy in healthcare today is Medtronic (NYSE: MDT). The medical device maker's business has been taking off. And when you combine its financials and long-term growth opportunities with its valuation and dividend income, it may be the ultimate healthcare stock to own right now.

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Medtronic reports best growth in a decade

Last week, Medtronic posted its year-end numbers for fiscal 2026 (which ended April 24). The results were impressive, with the healthcare company boasting of the highest growth rate it achieved in 10 years. While sales didn't double or triple, they rose by 8.4% for the full year. That's high for a business that in recent years has struggled to grow its top line. Management credits the results to "disciplined execution across our portfolio and continued operational rigor." Meanwhile, it still expects to generate more growth in the long run, particularly as it makes more investments in its pipeline.

The company's products and therapies help treat 70 different health conditions. And with a presence in over 150 countries, this is a vast and diversified business to invest in, giving you exposure to opportunities in healthcare that expand beyond just the U.S. market.

A low valuation and high yield sweeten the deal for investors

Single-digit growth may not be enough to convince you of a reason to invest in Medtronic, but what could tip the scales is what else you get with the stock. The most enticing may be the high yield, because at 3.5%, Medtronic offers a payout that's more than three times what you'd get with the average S&P 500 stock that pays just 1%. The dividend has also been growing, and with the recent increase, Medtronic's streak extends to 49 years, making it highly probable that the recurring income you receive from the stock will rise higher in the future.

Another appealing reason to own the stock is for its low valuation; currently, Medtronic's stock is trading at a forward price-to-earnings multiple of 14, based on analyst estimates of its future earnings. That's a modest price tag for a solid business that's profitable and growing at a decent pace.

Between the yield, the dividend income, and the strong results, Medtronic may be one of the best bargains in the market right now. Although the stock is down 15% this year, as a long-term investment, it may be a no-brainer buy.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Medtronic. The Motley Fool has a disclosure policy.